After Apple released its most recent financial results earlier this month, several online outlets jumped to publish headlines like this one on TechCrunch: “Apple’s iPhone Overtakes Android in U.S. Sales for the First Time Since 2012.”
That headline was rather breathless by comparison with the report the article draws on, which notes that iOS gained its latest lead over Android only “by the slimmest 0.1% margin.” The TechCrunch post goes on to observe that “across Europe Android still accounted for just over 66% of all sales through carriers and retail channels.”
What does the Apple-Android race mean for ebook publishers trying to calibrate their content and marketing strategies for the ever more global mobile market? Digital Book World sat down for a roundtable conversation with Marcello Vena, Managing Partner at All Brain, and Thad McIlroy, author of the new report, Mobile Strategies for Digital Publishers, to weigh those issues.
DBW: Android’s position in the ebook ecosystem is in some ways more difficult to measure, both in its own right and in relation to Apple. Where does that leave publishers and ebook distributors?
Marcello Vena (MV): In many ways it’s an apples-to-oranges comparison. Android isn’t a market but rather an open-source operating system (OS) used by dozens of device manufacturers in hundreds of smartphones and tablets (there are more than 10,000 different kinds of Android-connected devices worldwide), while iOS is a proprietary OS owned by one brand and used in just a handful of devices in standard sizes, mainly iPhones and iPads. Aside from the major retailers, few have a viable, large-scale ebook monetization solution for the fragmented mess of Android in the short- or mid-terms.
Reading reflowable ebooks isn’t a challenge on most mobile devices regardless of OS, but mobile commerce for ebooks certainly is. Most people buy ebooks from desktops and tablets, and mobile commerce is mainly limited to best-sellers and the few titles customers have in mind before entering mobile stores. Book searches and recommendations are still very poor on smartphones, especially for a-la-carte sales.
If you’re going to develop an Android app for ebooks, how many devices do you need to support in order to be successful at scale? Will big hardware manufacturers feature your app among the very few pre-installed ones? It’s doubtful. There are already millions of free apps in most app stores. This isn’t a great starting point. With Apple, all digital content sales are subject to iOS’s restrictions. Even Amazon doesn’t sell ebooks directly from its iOS Kindle app.
We have yet to see the alternative—a successful a-la-carte ebook store on a mobile site optimized for all mobile browsers, OSes and screen sizes. If you want to try that on Android, good luck. Whether with a mobile app or a mobile store, it would still take a massive investment for new e-commerce brands to acquire and retain substantial traffic.
Mobile subscription models may have better luck with customer acquisition and retention. It’s not by chance that we are seeing several start-ups in this area and barely any in a-la-carte sales.
Thad McIlroy (TM): It’s also clear that the higher pricing of Apple’s iPhones and iPads brings in a clientele that’s willing to spend more on content. Obviously that includes ebooks, but also apps, games, music and video. So in that sense I agree with Marcello that there’s considerably more uncertainty about Android’s role in the ebook ecosystem.
Still, I think it’s short-sighted to focus on Apple’s success in the U.S.
Yes, publishers should optimize their content for Apple devices. But that’s a limited strategy. Ebooks have turned book publishing into an international business, and that means easily reaching English-speaking readers not just in the U.S. but around the globe, where foreign rights deals have historically restricted international sales.
There are also at least as many people who speak English as a foreign language as speak it as their first language. The international opportunity for English-language publishers is huge and fast-growing. And outside the U.S. Android is almost always the top platform, usually by a large margin.
DBW: It sounds as though you’re more bullish on Android, Thad, than you are, Marcello.
MV: Well for one thing, Android faces an uphill climb when it comes to devices. If you have five devices in your household, you aren’t going to buy the same ebook five times. You will buy it once and share it across devices; the question is on which device you buy it, if you buy it from a mobile device at all.
Devices are dumb; they can’t make purchases on their own. So statistics about device shipments and installed bases aren’t really meaningful. Mobile reading and mobile buying are two very different activities. What matters is how many ebook readers buy from an Android device. How frequently do they do so, and how much do they spend?
We do know that among families that own both iOS and Android devices, more buying power, as Thad points out, is concentrated in the former. The number of households that regularly purchase a-la-carte ebooks on Android devices is unknown but certainly very modest.
TM: It’s true that Apple has shown very strong financial performance in its latest quarter, and that will have some impact on the Android market, but I think the analysts may be jumping to dramatic conclusions too quickly.
There’s another, very simple way to look at the Android-Apple contest. Let’s take the negative view—that only half as many Android users are interested in reading ebooks as are iOS users. Just in the U.S., that market would still be a potential 20 million+ readers. How can a publisher justify ignoring a market opportunity of those dimension?
MV: If we talk a-la-carte-sales, as I mentioned, nobody knows how many readers really buy and read books on Android, especially outside big proprietary ecosystems like Kindle, Nook, Kobo and Google Play. If you take the U.S. ebook market and remove those players, what’s left over?
The ‘available’ Android market that could be addressed is a fraction of the entire Android market—peanuts—maybe large enough for few thousand titles but certainly not for the entire ebook inventory of the U.S. market. It’s not a big game for the industry, even if it is at the title/author level. Gathering insights on consumer behavior is important, and that, to me, was the main purpose of Hachette’s pilot.
Even if Android becomes the No. 1 OS in the U.S., iOS still accounts for the most Internet traffic (in pageviews)—59%, while Android is around 36%.
Tablets are more effective than smartphones when it comes to mobile shopping. Looking at web traffic from tablets, iOS stands at 77% and Android at just 16%.
What’s more, excluding pageviews from Kindle Fire (7%) and Nook tablets (1.4%), the pageviews generated in the U.S. by Android-running tablets plunges to 7.3% vs. Apple’s 77%. This is a rough proxy for the share of consumers’ wallets you get by tapping into the “open” Android market with a mobile direct-to-consumer approach.
So I don’t expect a direct-to-consumer approach on Android to move the needle in either the U.S. or the UK anytime soon. In other countries Android commands a much higher share of pageviews, but the current sizes of the ebook markets in most of those places pale in comparison with the U.S.
The lesson is that in seizing a real mobile opportunity, timing is everything; it’s easy to be too early and too late. “Impossible” and “possible” aren’t eternal categories any longer.
TM: I don’t believe that there’s a significant direct-to-consumer opportunity for existing ebook content on mobile devices either. Realistically, no one can unseat Amazon, Apple, Nook or (to a much lesser extent) Kobo and Google.
But I do think publishers can and should still target Android users in other ways. They should be optimizing their digital files for both Android phones and Android tablets—as well as deciding if they’re going to bother with Android for Amazon or with Windows.
For much more data on the evolving mobile landscape and insights on how publishers can adapt strategically, see Thad McIlroy’s intensive new report, Mobile Strategies for Digital Publishing, now available here.